Founder of Antler Capital

Stanley Tsai, CFA

Thematic (Sector/Industry)

In the spirit of the long-awaited UEFA Euro 2020, we present our inaugural "China Financials: Silver Linings Playbook", which summarizes our views on the names that are best positioned to navigate an environment of progressively slower credit growth, tighter liquidity and rising defaults. 
Our screen consists of 100+ stocks in the A/H share universe, as well as a select number of international / non-traditional names that have significant exposures to China's financial system. We have a preference for larger-cap and liquid names, which are then filtered by our opinions on their fundamentals, value, momentum and recent trading volumes. We also try to make our selections versatile and less vulnerable to single-factor movements.
Each player's position on the pitch and the team formation itself convey incremental information about our thoughts on the sector's performance over a three to six-month horizon. To the extent possible, we intend to update our ideas on a periodic basis. This provides a feedback loop with our other ongoing research on the industry.
However, our team selections are not investment recommendations. Instead, they are meant to give structure to our analysis. The playbook allows us to articulate our views on the sector in a timely, concise manner. Our objective is to ensure we don't throw the baby out with the bathwater as sentiments on the sector remain bleak.
With that out of the way, the following is our starting XI. We will dive deeper into our rationale for our selections in the remainder of this insight (Exhibit 1).
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 726.047px;">Exhibit 1: China Financials | Silver Linings Playbook</td>
</tr>
<tr>
<td style="width: 726.047px;">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/213/768/original/image_768460236451623962508577.png?1623962508" class="editor-image img-responsive" data-smartkarma-image-id="213768"></figure>

Source: Our analysis
</td>
</tr>
</tbody>
</table>
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In the spirit of the long-awaited UEFA Euro 2020, we present our inaugural "China Financials: Silver Linings Playbook", which summarizes our views on the names that are best positioned to navigate an environment of progressively slower credit growth, tighter liquidity and rising defaults. 
Our screen consists of 100+ stocks in the A/H share universe, as well as a select number of international / non-traditional names that have significant exposures to China's financial system. We have a preference for larger-cap and liquid names, which are then filtered by our opinions on their fundamentals, value, momentum and recent trading volumes. We also try to make our selections versatile and less vulnerable to single-factor movements.
Each player's position on the pitch and the team formation itself convey incremental information about our thoughts on the sector's performance over a three to six-month horizon. To the extent possible, we intend to update our ideas on a periodic basis. This provides a feedback loop with our other ongoing research on the industry.
However, our team selections are not investment recommendations. Instead, they are meant to give structure to our analysis. The playbook allows us to articulate our views on the sector in a timely, concise manner. Our objective is to ensure we don't throw the baby out with the bathwater as sentiments on the sector remain bleak.
With that out of the way, the following is our starting XI. We will dive deeper into our rationale for our selections in the remainder of this insight (Exhibit 1).



Exhibit 1: China Financials | Silver Linings Playbook





Source: Our analysis




Related Insights
China Macro: Consumers Remain on the Sidelines, as Their Home Equity Grows 
Glut and Famine: We Might See Snow in China This Summer 
China Macro: PPI Peaks, while CPI Eases Tightening Fears 
China Macro: Exports Disappoint, but It's Still Early in the Game 
Glut and Famine: China's Monetary Conditions a Notch Tighter in May 
ICBC: The Bond Identity | A Zero-Growth Dividend Discount Story 
BOC Aviation (2588 HK): The Stars Don't Look Bigger, but They Do Look Brighter

China Financials: Silver Linings Playbook

APAC IPOs & Placements

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IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

China Youran Dairy Group Ltd / Equity Capital Markets

<div>
<a href="https://www.smartkarma.com/entities/china-youran-dairy-group-ltd" target="_blank" data-smartkarma-citation="entities:31075:1" rel="noopener">China Youran Dairy Group Ltd (9858 HK)</a> (CYD) raised about US$643m at HK$6.98 per share, the bottom-end of its IPO price range. 
CYD is an integrated provider of products and services in the upstream dairy industry. The company is a leader in the various upstream industries that it operates in even though they are mostly fragmented.
In this note, we will discuss deal dynamics and update valuation.
We have previously covered the IPO in:
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<a href="https://www.smartkarma.com/insights/china-youran-dairy-pre-ipo-phip-updates-much-better-disclosure" target="_blank" data-smartkarma-citation="insights:51794" rel="noopener">China Youran Dairy(悠然牧业) Pre-IPO - PHIP Updates - Much Better Disclosure</a> </li>
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<a href="https://www.smartkarma.com/insights/china-youran-dairy-pre-ipo-peer-comparison-youran-is-the-leader" target="_blank" data-smartkarma-citation="insights:51796" rel="noopener">China Youran Dairy(悠然牧业) Pre-IPO - Peer Comparison - Youran Is the Leader</a> </li>
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<a href="https://www.smartkarma.com/insights/china-youran-dairy-ipo-reasonable-valuation-but-there-will-be-significant-overhang" target="_blank" data-smartkarma-citation="insights:52634" rel="noopener">China Youran Dairy(悠然牧业) IPO - Reasonable Valuation but There Will Be Significant Overhang</a> </li>
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China Youran Dairy Group Ltd (9858 HK) (CYD) raised about US$643m at HK$6.98 per share, the bottom-end of its IPO price range. 
CYD is an integrated provider of products and services in the upstream dairy industry. The company is a leader in the various upstream industries that it operates in even though they are mostly fragmented.
In this note, we will discuss deal dynamics and update valuation.
We have previously covered the IPO in:



China Youran Dairy(悠然牧业) Pre-IPO - A Leader Pulling Ahead in a Fragmented Market 

China Youran Dairy(悠然牧业) Pre-IPO - PHIP Updates - Much Better Disclosure 

China Youran Dairy(悠然牧业) Pre-IPO - Peer Comparison - Youran Is the Leader 

China Youran Dairy(悠然牧业) IPO - Reasonable Valuation but There Will Be Significant Overhang 



China Youran Dairy(悠然牧业) IPO Trading - Weak Demand

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Quantitative Analysis

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jun 11.In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Evergrande Group (3333 HK) (HKD 499.1 million worth of buybacks), China Feihe Limited (6186 HK) (HKD 215.4 million worth of buybacks), Sea Holdings (251 HK) (HKD 166.5 million worth of buybacks).

Hong Kong Exchange publishes share repurchases by listed companies on a daily basis. In our weekly note, we will provide statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jun 11.In the past 7 days, the top 3 companies that repurchased the most shares from the market were China Evergrande Group (3333 HK) (HKD 499.1 million worth of buybacks), China Feihe Limited (6186 HK) (HKD 215.4 million worth of buybacks), Sea Holdings (251 HK) (HKD 166.5 million worth of buybacks).

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Credit

In this month’s "In-Focus" section, we provide an update on Chinese developers’ JV exposure, including typical structures and the JV exposure of the companies under our coverage. The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the "In-Focus" section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market.

   In this month’s "In-Focus" section, we provide an update on Chinese developers’ JV exposure, including typical structures and the JV exposure of the companies under our coverage.    The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the "In-Focus" section. The Asia Monthly is intended to broaden investors' understanding of the Asian USD high-yield market. 

Asia HY Monthly - Chinese Developers' JV Exposure - Lucror Analytics

China

China Evergrande Group is an integrated residential property developer. The Company, through its subsidiaries, operates in property development, investment, management, finance, internet, health, culture, and tourism markets.

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Evergrande (3333 HK)

China Financials: Silver Linings Playbook

Our Silver Linings Playbook outlines our views on the China financials names that are most likely to remain resilient in the face of macro...

Stanley Tsai, CFA

China Youran Dairy(悠然牧业) IPO Trading - Weak Demand

China Youran Dairy Group Ltd (9858 HK) (CYD) raised about US$643m at HK$6.98 per share, the bottom-end of its IPO price range.

Zhen Zhou, Toh

Hong Kong Buybacks: Evergrande HKD499m Buyback

We highlight the top 2 companies that repurchased the most shares from the market this week were China Evergrande Group (3333 HK), and China Feihe...

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In this month’s "In-Focus" section, we provide an update on Chinese developers’ JV exposure, including typical structures and the JV exposure of...

Lucror Analytics

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